The first half result was in-line with Morgans expectations at the revenue level and well ahead of earnings (EBITDA) forecasts. FY21 guidance was reaffirmed and no interim dividend declared.
The broker highlights the earnings margin expanded robustly in the first half assisted by growth in higher margin businesses (US private equity, custody), scale/automation benefits and government grants.
Funds under administration (FUA) growth was considered strong by the analyst and the company added around 71,000 investors to its platform with the launch of its new Quoted Funds product.
The target increases to $1.22 from $1.14, as Morgans lowers the FY21 EPS forecast by more than -20% on a higher share-based payments expense though lifts FY22 estimates by circa 30% on higher earnings margin assumptions. The Add rating is retained.
Sector: Diversified Financials.
Target price is $1.22.Current Price is $1.06. Difference: $0.16 – (brackets indicate current price is over target). If MAI meets the Morgans target it will return approximately 13% (excluding dividends, fees and charges – negative figures indicate an expected loss).